Multiple Choice
A start-up firm is making an initial investment in new plant and equipment. Currently equipment is depreciated on a straight line basis over 10 years. Assume that Congress is considering legislation which will allow the corporation to depreciate the equipment over 7 years. If the legislation becomes law, and the firm implements the 7-year depreciation basis, which of the following will occur?
A) The firm's tax payments will increase.
B) The firm's net income will increase.
C) The firm's taxable income will increase.
D) The firm's net cash flow will increase.
E) The firm's operating income (EBIT) will increase.
Correct Answer:
Verified
Correct Answer:
Verified
Q33: Assume that a company currently depreciates its
Q34: Harmeling Enterprises experienced a decline in net
Q36: A firm has notes payable of $1,546,000,
Q37: Which of the following statements is most
Q39: Retained earnings is the cash that has
Q40: A seven-year municipal bond yields 4.8 percent.
Q41: A municipal bond issued by the City
Q42: The key importance of annual report information
Q43: A 5-year corporate bond yields 9 percent.
Q66: Total net operating capital is equal to